E-mini S&P 500 Index (ES) Futures Technical Analysis – Enough Selling Pressure to Reach 4530.50 – 4520.25

March E-mini S&P 500 Index futures are under pressure shortly after the opening on Monday as U.S. Treasury yields reached a new two-year high and investors fretted about the prospect of rising interest rates and a surge in COVID-19 infections.

Monday’s sell-off follows the bruising first week of the year when a strong signal from the Federal Reserve that it would tighten policy faster to tackle inflation, and then data showing a strong U.S. labor market, unnerved investors who had pushed equities to record highs over the holiday period.

At 14:49 GMT, March E-mini S&P 500 Index futures are trading 4626.50, down 41.25 or -0.88%. The S&P 500 Trust ETF (SPY) is at $458.90, down $7.19 or -1.54%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down last week when sellers took out 4747.50, following a closing price reversal top on January 4.

A trade through 4520.25 will reaffirm the downtrend. The main trend will change to up on a trade through 4808.25.

The short-term range is 4520.25 to 4808.25. The index is currently trading on the weak side of its retracement zone at 4664.25 to 4630.25, making it resistance.

On the downside, the next major target is a retracement zone at 4530.50 to 4465.00. This is a value area that could attract new buyers, at least, temporarily.

On the upside, the nearest resistance is a retracement zone at 4712.50 to 4735.00.

Daily Swing Chart Technical Forecast

The direction of the March E-mini S&P 500 Index into the close on Monday will be determined by trader reaction to 4630.25.

Bearish Scenario

A sustained move under 4630.25 will indicate the presence of sellers. This could trigger an acceleration to the downside since the nearest support is a 50% level at 4530.50, followed by a main bottom at 4520.25.

Bullish Scenario

A sustained move over 4630.25 will signal the presence of buyers. If this creates enough upside momentum then look for a surge into 4664.25. Overcoming this level could trigger an acceleration to the upside with 4712.50 to 4735.00 the next major target area.